If unemployment is below its natural rate, what happens to move the economy to long-run equilibrium?
a. Inflation expectations rise which shifts the short-run Phillips curve to the right.
b. Inflation expectations rise which shifts the short-run Phillips curve to the left.
c. Inflation expectations fall which shifts the short-run Phillips curve to the right.
d. Inflation expectations fall which shifts the short-run Phillips curve to the left.
a
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The real minimum wage rate
A) has generally decreased during the 1970s and 1980s and has fluctuated around a $6.50 per hour average since the mid-1980s. B) has stayed in the range between $6 and $5 (measured in 2009 dollars per hour) since 1967. C) fell after 1967 until it reached a minimum around 1985 and has generally risen since then. D) was at its highest level in 1995. E) has generally increased since 1967.
Refer to the above figure. Suppose the government imposes a minimum wage rate of $20.00 per hour. This will likely result in
A) a surplus of labor. B) a shortage of labor. C) an equilibrium in the labor market. D) an increase in the demand for labor.
The demand for seats in 10 a.m. classes at the university is higher than the demand for seats in 8 a.m. classes. The supply of seats is fixed. If the university can only charge a single price and wishes to maximize the total number of seats purchased during the day, it should set the price
A) at equilibrium for 8 a.m. classes. B) at equilibrium for 10 a.m. classes. C) midway between the two equilibria. D) below either 8 a.m. or 10 a.m. equilibrium price.
Under adaptive expectations theory, people expect the rate of inflation this year to be:
A. zero, regardless of the rate last year. B. the same as last year. C. the rate based on predictable and fiscal policies. D. always higher than last year.